Google Street View, the controversial website that shows 360-degree street views of many of Britain's cities does not breach the Data Protection Act, the information commissioner ruled today.

Hundreds of people complained that their privacy was breached by the service, which launched last month for 25 cities and towns.

Today the Information Commissioner's Office rejected those complaints but said it would watch Google closely to ensure that it responded quickly to requests for the removal of images that identified individuals.

Google has promised to blur faces and numberplates, but many people have complained that they are identifiable in the photographs.

Scores of pictures, including one of a man leaving a Soho sex shop, were removed the day after the site's UK launch.

In a statement the Information Commissioner's Office said an outright ban on Street View would be "disproportionate to the relatively small risk of privacy detriment".

David Evans, senior data protection practice manager said: "Watch the TV news any day this week and you will see people walking past reporters in the street. In the same way, there is no law against anyone taking pictures of people in the street as long as the person using the camera is not harassing people.

"Google Street View does not contravene the Data Protection Act and, in any case, it is not in the public interest to turn the digital clock back. In a world where many people tweet, Facebook and blog, it is important to take a common sense approach towards Street View and the relatively limited privacy intrusion it may cause."

He added: "As a regulator we take a pragmatic and common-sense approach. Any images of people's faces or numberplates should be blurred. We emphasised the importance of blurring these images to protect people's privacy and limit privacy intrusion. Google must respond quickly to deletion requests and complaints, as it is doing at the moment."

The Information Commissioner's Officer confirmed that it met Google last year to discuss how Street View would be implemented. It was satisfied at the time that the company was putting in adequate safeguards to protect privacy.

A Google spokeswoman said: "We are pleased with the ICO's statement. We took care to build privacy considerations into Street View from the outset and have engaged with the ICO throughout the development process.

"We recognise that a small minority of people may not wish their house to be included in the service, which is why we have created easy to use removal tools."

Last month the campaign group, Privacy International, lodged a formal complaint with the Information Commissioner's Office. In a 2,500 word response, the ICO said it was satisfied that Google was not breaching privacy laws.

An American couple lost a legal action against Google earlier this year in which they claimed Street View amounted to trespass and invasion of privacy.